U.S. Launches ‘Operation Economic Outcast’, Intensifying Sanctions Against Iran

TL/DR –

The Trump administration has launched a new economic pressure campaign against Iran, threatening tougher sanctions on countries that continue trading with Iran. The campaign, named Operation Economic Outcast, aims to avoid war and break Iran’s grip on the Strait of Hormuz. The sanctions could heavily impact Iran’s economy as the country gets a majority of its revenue from oil, 90% of which is bought by China, and this new campaign could lead to possible sanctions against China as well.

US Launches ‘Economic D-Day’ Against Iran with Operation Economic Outcast

Geoff Bennett: Today, the Trump administration initiated an “economic D-Day” on Iran. The new campaign, named Operation Economic Outcast, threatens intensified sanctions on countries that persist trading with Tehran. This is a strategic move to apply maximum economic pressure and deter returning to war, particularly to loosen Iran’s control over the Strait of Hormuz. Nick Schifrin has more details.

Nick Schifrin: Amid naval standoffs in the Strait of Hormuz, the Trump administration has re-emphasized economic pressure. Treasury Secretary Scott Bessent warned that any economic engagement with Iran could expose those responsible to extensive American power.

Iran’s primary revenue is from oil, and the majority of it is purchased by China. Both direct flights and financial ties are included in these engagements, but Trump has underscored the importance of U.S.-China strategic stability.

As a result of the new campaign, Iran’s currency hit a record low while Iranians grapple with skyrocketing inflation. Meanwhile, Iranian leaders are threatening to block U.S.’ Gulf allies’ oil exports and promised military retaliation.

Scott Bessent: No entity is immune to U.S. sanctions.

Nick Schifrin: In an attempt to resuscitate diplomacy, General Asim Munir of Pakistan visited Tehran today. He, along with Oman’s foreign minister, are playing key roles in negotiation efforts. To provide more insights on the situation, we turn to Miad Maleki, a senior fellow at the Foundation for the Defense of Democracies and former associate director for sanctions targeting in the U.S. Treasury Department with a focus on Iran.

Nick Schifrin: The U.S. has imposed sanctions on Iran for years. What makes this new version of maximum pressure different, and why might it yield different results?

Miad Maleki: It’s indeed true that Iran’s economy has been subject to comprehensive sanctions. However, what makes today’s version different is the emphasis on enforcing these sanctions more forcefully by engaging with partisan allies and other nations. This includes not only U.S. economic sanctions but also European Union, U.K., and other countries’ unilateral sanctions against Iran.

Nick Schifrin: Essentially, the effectiveness of today’s sanctions is contingent on the president’s diplomatic engagement with countries like China and the United Arab Emirates, who continue to do business with Iran?

Miad Maleki: Precisely. Sometimes, a threat can be more impactful than the tool itself. The Treasury Department has likely developed individual engagement strategies for each jurisdiction that still conducts trade with Iran – whether through direct engagements or through sanctions actions. This strategy is aimed at better enforcement of sanctions.

Nick Schifrin: The key question is: how will these sanctions impact Beijing’s purchase of Iranian oil, and is President Trump willing to sanction China?

Miad Maleki: That’s a tough question. Currently, Chinese purchases of Iranian oil have dropped significantly due to fear of sanctions. The Treasury Department’s strategy is to engage with banks to ensure that revenue from Iran’s oil to China stays in China and doesn’t leak to the Iranian regime. However, it’s unclear if the department is ready to take on a major bank.

Nick Schifrin: Despite implementing maximum economic pressure, some experts argue that this won’t change Iranian behavior. Iran can withstand the pain of economic sanctions, even if China or the UAE cuts them off. What’s your take on this?

Miad Maleki: The Iranian regime may absorb the pain at the expense of the Iranian people. Historically, Iran has only responded to pressure. If we see meaningful enforcement of sanctions, the regime might have to accept, as they have historically.

Nick Schifrin: Thank you, Miad Maleki.

Miad Maleki: Thanks for having me.

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